The bigger impact from a loss of tax-exempt status would be that individuals would no longer be able to take tax deductions for their contributions to the schools. I'd imagine the contributions would dry up pretty quickly at that point but if supporters did still contribute then the federal govt. could realize more revenue from the lack of the previous charitable tax deduction regardless of whether the intstitutes turn a profit or not.

This is all just conjecture though because it will never happen. You'd have to make the entire University a taxable entity or else spin off the athletic branch into a separate entity in which case, of coarse it would be taxed because the only reason athletics enjoys tax-exempt status is because of the association with the academics.

...and Todge Rodge, if you're going to be a condescending ass atleast get your facts right.